Will Fleetwood Mac have any control over Ticketmaster

[Cour]

Here's an article about the new Ticketmaster plan to auction their best tickets. I was wondering how much control the artists will have to say "we don't want to do that".

Is the artist still going to only get the original ticket price and Ticketmaster will pocket the rest of the money? For some reason I thought I had read somewhere that the artist was going to benefit from this, if that's true then wouldn't they have to give their okay for the auctions?

I guess we'll all be sitting in the nosebleeds. If this is put into effect and works well, the next best tickets will still go to the scalpers and the pickings will be even slimmer. Not to bring up the whole fanclub debacle, but this will put a new pressure on the good fanclubs to make TM remove the good fanclub seats and shrink the pool TM can auction. Many fanclubs have a say over which seats go to their fans and know and pick exactly which ones are going to the fanclub. I think TM would have a major problem with that and the new system, before this auction process, a $125 seat was still $125 to TM and they didn't care who they sold it to.







Motley Fool
Ticketmaster Going Once...
Wednesday September 10, 8:14 am ET
By Rex Moore


Ticketmaster has come up with an interesting idea that could wind up being one of its most important business developments in years. No, the company we love to hate is not going to add another predatory service fee to cover the cost of collecting all its other service fees (though I shouldn't give them any ideas). Instead, it will soon start auctioning some of its tickets rather than selling them. It's an idea that could be far more important than it appears.
Here's the scoop, as first reported by The New York Times. Later this year, the world's largest ticket distributor will auction choice seats to certain events on its ticketmaster.com website, in a process similar to eBay (Nasdaq: EBAY - News) auctions. There will likely be no "face value" assigned to the tickets; they'll just fetch what they fetch. The specific events and seats will be determined on a case-by-case basis, and the artists and promoters will have a large say in the matter.

Ticketmaster is owned by InterActiveCorp. (Nasdaq: IACI - News), Barry Diller's identity-challenged entity that was previously known as USA Interactive, and USA Networks before that. (Don't get me started on that; how ridiculous are those name changes?) It sold more than 95 million tickets valued at more than $4 billion last year, and its reason for going to an auction format is obvious: Management thinks it can rake in even more money.

Pros
What's to like about this scheme (aside from the "more money" part, if you're a shareholder)? It will likely cut down on the scalping trade, for one. Scalpers, of course, wind up buying a lot of choice seats and reselling them at higher prices. They're the biggest reason the general public has little chance at buying the best seats to big events at face value.

Another plus is that the auction format is capitalism at its best. The seats are worth exactly what someone's willing to pay for them; thus, auctions are the best way to determine the real value of the tickets.

Cons
Some critics have pointed out that the auction format takes the best seats out of the hands of those who can't afford to bid up the prices. However, that's the case in just about any situation where items are priced efficiently. But the problem I have is that not all seats to an event will be auctioned off. I think if the best seats are going up for bid, so should the mediocre seats. That might allow for some relative bargains on the low end for those who can't afford the high end, and it would price the entire event at what the market is willing to bear.

Anyway, it appears that Ticketmaster's auction concept is going over like a lead balloon with many fans. An unscientific poll conducted by a Florida television station found an overwhelming 90% of respondents did not like the idea.

"There will be a huge backlash if people can't go to concerts they want to see because scalpers, or people who can pay the most, are getting first access to all the tickets," consultant Adam Cooper told the Toronto Sun. "Really, they are not in the business of trying to maximize profits by selling the tickets for as much as they possibly can."

That's the ticket
That may be true to a certain extent, but when you get right down to it, Ticketmaster exists to maximize its profits. And it happens to do a very good job of it. I really, really do not like the company as a consumer, but I can't blame it for wanting to test the auction waters.

And it's not much of a test, because the system already exists -- and works. I've purchased baseball tickets from sellers on eBay for a couple of years now. I'm able to buy good seats from season ticket holders who aren't going to certain games and are looking to get back some of their money. Usually I'm able to buy below face value, but tickets for big games normally sell for more than face. (Someone tried to get $1,200 for two seats to the last Phillies game to be played in Veterans Stadium in Philadelphia, but no one bit at the Buy It Now price.)

As I write this, there are 8,826 auctions for concert tickets on eBay, most featuring two or more tickets. There are 45 auctions for movie tickets, 641 for theater plays, and 17,861 for sporting events. It's a thriving trade, and you'll find many of the scalpers selling here. eBay will no doubt lose some business as a certain percentage of these auctions -- especially high-dollar ones -- move to Ticketmaster. That's not to say they won't wind up back on eBay, but probably at less profit to the seller than before.

If this proves successful with Ticketmaster, I can't help but wonder what other industries might do with the concept. For example, what if congressmen decided to vote the way their biggest donors wanted them to? Woops, bad example.

OK, so maybe this won't spread much beyond big-event ticketing. Most other pricing is fairly efficient, and most goods and services aren't subject to wild swings in value. Auctions work best when there are a limited number of items available, and especially when there is a specific date involved. It might be interesting for an airline to test the concept, for example, because there are a limited number of tickets available for each flight.

But in the end, a merchant must try to receive the maximum compensation it can for its goods, regardless of the method. And that's why Ticketmaster is smart to auction only choice seats and sell the rest as normal, regardless of what I or anyone else thinks about it. It is getting the most it can for each ticket... and that's the name of the game.

Rex Moore grudgingly contributed to Ticketmaster's revenue on his recent four-day, four-ballpark road trip. At time of publication, he owned shares of eBay. You can view all of his holdings, and the Fool's disclosure policy, for a small convenience fee.

[flyfirefly]

Ticketmaster's getting a lot of heat at current.

"Capitalism at it's best"

[glitter_fades]

I expect artists would have some control over this happening. I'm not sure how much input they get with ticket sales, but if they buy into selling tickets this way, I'd consider using a term like "artist" to describe themselves is laughable. If making money and maximizing profits is all everyone cares about, performers should just call themselves entrepreneurs not artists. On the other hand, if artists let their managers only bargain for a set payday per show, and bands release all say over how tickets are sold, they may not be directly to blame, but they are abdicating responsibility they have to their fans. The more artists who do this, the less artistic the whole music industry becomes and the "artitists" themselves are partly to blame for it. Lets see if any big name artists or bands come out publicly against this like a few did when Ticketmaster took monopoly control over ticketing. Those few bands finally got quiet when it became an issue of their own profits. This issue will probably go the same way.

[Cour]

The article said "later this year" so it will be interesting how the artists respond to it. This article indicates they're not going to see any of the extra money and it's TM attempt to take the auction business away from Ebay. The scalpers will get the second best seats and the fans will get the scraps. The promoters aren't going to see a dime of this extra money either, it seems it's all going to TM.

It will be interesting to see what the fanclubs do and if the artists put up a fight. This also means that seats released at the last minute can go to auction too, so those seats won't be available to the fans at face value anymore. TM can sell those right up to the last minute and arrange pick up at wil call windows.

[glitter_fades]

Fans can have a say using their wallets. They don't have to buy tickets at all. If TM auctions most of the good seats for unlimited prices, yet the other seats are empty, what has anyone gained? If fans can't get the good seats, what will they do next? It remains to be seen. Sadly, a lot of people who have more money than brains will pay a lot just to go out to a show even if they aren't big fans of the performers. I picture a lot of shows with non-fans sitting ringside while fans get the leftovers. Who's going to buy the leftovers? Not me.

Problem is, some fans often will pay "anything" (sometimes money they don't have) to see their idols. I won't be going to concerts at all if this is the way sales go. Not because I can't afford it (I can) but because I won't pay "anything" just to sit close to my favorite rock star. I also don't want to pay less just to "be there" if I can't see from the rafters or the back of the floor. If this method is allowed to be used and fans respond with apathy, that's the way it's gonna be. Non-fans and only well heeled or financially irresponsible fans up front. Who's going to buy the other seats if they can't get a fair shot at a decent seat? Again, not me. I'll stay home with a DVD.

[Cour]

I don't disagree with a lot of what you're saying and had the same thoughts as I was typing one of my replies. It reminded me of what the music business did to themselves with the prices of the cds, now they're lowering prices in an attempt to get back buyers who said $18 is too much for a cd. You have to wonder if this won't have a similiar effect on the the concert going habits of fans for a lot of artists. It's definitely going to shut a lot of fans out and once you've learned to live without going to a lot of concerts, it's going to take a lot to bring you back. If I can't get a good seat, I'd rather stay home. It seems like it's not a good thing no matter how you look at it, especially since it won't get rid of scalpers, they'll just get second dibs instead of first. The monopoly that TM holds is the real problem, imo.